Olive & Oil 04/11/2013

The vitivinicultural world has returned to 2006 levels but consumption is stabilising

Spain has recorded a high level of wine production this year, of 40 Mhl. With 45 Mhl, Italy has produced 2% more than in 2012. An increase of 7% in France. Development in the United States, and record production in Chile and New Zealand

As in the previous year, the development of vineyards in the European Union (EU) is no longer affected by the community abandonment programme. Even so, this does not mean that that EU vineyards have stabilised in the long-term.
The available data indicates an expected decline in vineyards in Spain, the country with the largest area under vines, and in Italy between 2012 and 2013, while Portuguese, Romanian, Greek and Austrian vineyards are predicted to remain stable compared with the previous harvest.
These initial indications could lead to a fall of 10 kha-20 kha in community vineyards between 2012 and 2013. This decrease is around two times less than the reduction of 36 kha recorded between 2011 and 2012.

For several harvests, the overall growth rate of planted areas in the southern hemisphere and the United States has slowed compared to that observed around 2000, but seems to have stayed positive until very recently.
The question is whether this trend has continued between 2012 and 2013. Indeed, South American vineyards, which continued to develop between 2011 and 2012, could, as for those in Argentina, Chile and Brazil, continue to growth albeit at a lower rate, since early indications from Chile indicate stability in their vineyards between 2012 and 2013.
Although South African vineyards have continued to slowly dwindle since 2006 (a trend of several hundred ha per year), the available data on Australian vineyards seems to
confirm that wine vineyards have in effect consistently decreased between 2011 and 2012 (provisional assessment of (- 8 kha).

Based on a variability hypothesis of 10% of the 2012 harvest level for countries not overed in 2013, this information leads to the proposal of a 2013 world wine production level excluding juice and musts of between 276.5 and 285.4 million hl (281.0 Mhl midrange
The 2013/2012 relative change is therefore very marked, between +7.1 and +10.5%, and so, on average, is up sharply by nearly 23 Mhl compared with vinified production in 2012. It should be remembered, nevertheless, that 2012 production was extremely modest (provisional level: 258.3 Mhl). The last time there was an equivalent level of production (282.6 Mhl) was in 2006, when the global vineyard surface area was 7799 kha, which is 300 kha more than the expected area for 2013.

In the EU, after 5 modest consecutive harvests (from 2007 to 2011 inclusive) and an exceptionally low 2012 harvest, 2013 wine production may be qualified as relatively high, especially given the recent reduction in the surface area of its vineyards.
Indeed, forecasts from the main European producing countries were up, very significantly in some cases, compared with those of 2012.
This is especially the case in Spain where, with 45.5 Mhl of wines, juice and musts, vinified production should be particularly high at around 40 Mhl, the uncertainty resting on the quantity of musts and juice, which should return to its normal level of between 5 and 6 Mhl. The increase in the vinified quantity would thus be 23% compared with the low 2012 production. However, the most significant relative recovery has been recorded in Romania where, after three very low harvests, in 2013 the country should reach a production level which better reflects its potential production of nearly 6 Mhl, that is, +79%/2012.
In France, even though 2013 vinified production remains modest at slightly over 44 Mhl, an increase of 7% has nevertheless been recorded compared with the very low 2012 production (41.2 Mhl). Portugal has also recorded growth of 7% over the observed period, though in comparison to a "normal" 2012 vinified production, enabling the country to produce 6.7 Mhl.
Contrary to initial forecasts, Italy has finally recorded a slight growth in vinified production in 2012 compared to that of 2011, and has also experienced growth in its 2013 vinified production of 2% over a year, meaning wine production should approach 45 Mhl.
Elsewhere in the EU, it should be noted that Germany's production has stayed at a level very close to 9 Mhl, while Greece has recorded an average to high production reaching 3.7 Mhl. Croatia, the 28th EU Member State, should reach 1.4 Mhl in 2013.
Consequently, total EU-28 production (integrating here the production of very small EU producers not listed in the annex), valued at a mid-range estimate of 163.9 Mhl excluding juice and musts, was up significantly (by 16.0 Mhl, that is, +11%) compared with the very modest production of 2012 (provisional result: 147.9 Mhl). This is a level of production close to that of 2009 (164.9 Mhl).

Outside the EU, between 2008 and 2012, fairly stable overall vinified production has been recorded. 2013 vinified production marks a departure from this trend and should significantly increase by nearly 7 Mhl (+9.5%/2012), with all of the monitored countries recording growth in production excluding juice and musts compared with the previous year.
The United States should record a clear rise in its 2013 wine production, particularly in California, compared with the average 2012 production of nearly 22 Mhl (in contrast with 20.51 Mhl according to 2012 provisional data)3
In South America, although Brazil seems to have again recorded a modest production of less than 3 Mhl for the second year in a row, the overall trend has been an increase: .
- Chile should reach a new record with 12.8 Mhl, a likely consequence of the start of production for the recent plantations that was already becoming apparent in 2012,
- in Argentina, where vinified production of 15 Mhl has been recorded after the modest 2012 harvest (reminder: 11.8 Mhl, that is, + 27%).
In Oceania, 2013 production in New Zealand has hit a new record of nearly 2.5 Mhl, while in Australia 2013 production could reach 13.5 Mhl (estimate based on grape production and average juice yield), a significant rise compared with 2012. If it is confirmed that this result was achieved following a significant reduction in vineyards between 2011 and 2012, the level of productivity may be considered substantial, thus marking a departure from the 2009-2011 period during which there were no cases where vinified production reached 12 Mhl.
South Africa should obtain a 2013 vinified production of 11 Mhl, that is, + 3.8%/2012 (including distilled wines and wines for brandy).

In 2013 world wine consumption levels of between 238.4 and 252.1 Mhl.
So, if we use an evaluation of 2013 world wine consumption levels of between 238.4 and 252.1 Mhl, we can then restrict the magnitude of the “production-consumption” difference.
In 2013, for the first time since 2007, this should once again be higher than the estimated industrial needs, a level considerably higher at the mid-range estimate (with 35.7 Mhl) than the 2012 provisional level (15.2 Mhl).

di T N